Service tax on rent
Querist : Anonymous
OTHERWISE, DIRECTOR WILL PAY.
THANKS.
PLEASE CLICK ON "THANKS", IF YOU ARE SATISFIED WITH MY REPLY.
RAJEEV KR. GARG.
CONSULTANT.
Querist : Anonymous
Here’s the clarification on **service tax liability on rent received by a shareholder/director from his own company**:
---
### Facts Recap:
* The **shareholder/director owns the land/property**.
* The **company is the tenant** and pays rent to the shareholder/director.
* Question: Who bears service tax on rent received?
---
### Service Tax on Rent under Indian Law (Pre-GST):
1. **Service Tax on Rent is applicable under the category “Renting of Immovable Property Service.”**
2. The **service provider is the person receiving the rent** (in this case, the shareholder/director, as owner and landlord).
3. The **service recipient is the tenant** (the company).
4. **Threshold limit:** Service tax is payable if the aggregate value of rent exceeds Rs. 10 lakhs per annum.
5. **If the rent paid by the company exceeds Rs. 10 lakhs per year, the landlord (shareholder/director) must register for service tax and pay service tax on rent received.**
6. The company (tenant) is generally **not liable to pay service tax on rent paid** — the liability rests with the owner/landlord.
---
### So, in your case:
* Since the **shareholder/director is the owner and receiving rent**, they are liable to pay service tax if rent exceeds Rs. 10 lakhs per annum.
* The company (tenant) pays rent but does **not bear the service tax**.
---
### Important notes:
* If the shareholder/director is not registered for service tax and the rent is less than Rs. 10 lakhs per annum, no service tax applies.
* The landlord should charge service tax on rent (presently 15% approx under GST replacement, but under old service tax regime it was 12.36%).
---
If you want, I can help with calculation examples or registration process details.
Would that help?
Click here to login now
Similar Resolved Queries
- INTEREST APPLICABLE ON ITC REVERSAL PORTION
- Opting our of sec 44AD
- Value of property in capital gain
- Regarding TDS Applicability For Director Remuneration
- Multiple trade mark
- LC charges in relation to Asset purchased should be Capitalised ?
- SALE OF MOTOR CAR BY REGISTERED INDIVIDUAL
- Copyright software
- Transporter Declaration form
- Applicability of GST on deduction for cancellation of Pension policy
- GST Treatment of Insurance Commission for Existing GST Holder
- Cash gift by grand mother to her grand daughter
- Tax amount diff in Gstr1 and 3B in tax compare reports
- Tds on GST in connection with sale to public company
- Restoration of certificate of practice
- Regarding change in correspondence address in SSP portal
- No Compliences after incorporation
- USEFUL LIFE OF USED/SECOND HAND COMMERCIAL VEHICLES
- Claiming TDS deducted by builder on Hardship compensation and Corpus
- Address Change to another state of a Registered Trust with 12AB approval
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
CAclubindia
